HSE-private hospitals deal exempt from regular accounting practices

The deal between the HSE and private hospitals, which saw those institutions effectively taken over to provide additional bed capacity for the coronavirus crisis, was agreed in such a manner as to be exempt from regular accounting practices.
HSE-private hospitals deal exempt from regular accounting practices

Sinn Féin health spokeswoman Louise O'Reilly. Picture: Gareth Chaney
Sinn Féin health spokeswoman Louise O'Reilly. Picture: Gareth Chaney

The deal between the HSE and private hospitals, which saw those institutions effectively taken over to provide additional bed capacity for the coronavirus crisis, was agreed in such a manner as to be exempt from regular accounting practices.

A subsection of the deal states that the HSE was to “use its best endeavours” to ensure that the 19 hospitals involved would be exempt from keeping accounts of all income and expenditure for the duration of the controversial contract.

The rationale for the inclusion of such a clause is not clear. Neither the HSE nor the Department of Health had commented on the clause at the time of publication.

Sinn Féin health spokeswoman Louise O’Reilly described the clause exempting the hospitals from providing regular accounts as being “not a bit transparent”.

“This has been a very good deal for the private hospitals, and a very bad one for the taxpayer,” she said, adding that she was “absolutely surprised” such a clause had been inserted into the contract.

This deal was announced ahead of time when it didn’t need to be - now we see the potential pitfalls in terms of oversight and accountability.

The final bill for the use of the private hospitals is expected to be finalised by auditors EY when the contract comes to an end.

The State officially entered into the deal to acquire the country’s various private hospitals on March 30, three days after lockdown was instigated but several weeks after the possibility was first mooted, in order to effectively double the number of beds available across the country in the face of the spread of Covid-19.

Less than half of Ireland’s 600 private consultants have thus far signed up to the HSE’s deal, which was initially designed so that only public consultancy work could be carried out by them.

The Health Act 2004, upon which the private hospital contract relies, states that service providers can be exempted from performing regular accounting of their overheads should they receive money from the HSE “that does not exceed the amount that may be decided by the minister”.

At present the deal is understood to be costing the State €115 million per month.

A similar exemption can be provided to any “other categories of service providers as may be specified by the Minister”.

The three-month deal, set to expire at the end of June, is expected to be extended for a further month by the HSE this week, with senior health officials and Minister Simon Harris repeatedly having asserted that the additional capacity will be required should a second wave of the coronavirus strike the country.

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